American National P&C No Notice of Changes in Insurance Policy Class Action

If an insurance company makes changes to a policy’s coverage, what kind of notice, discussion, or consideration does it owe to policyholders? In this class action, the complaint alleges that American National Property and Casualty Company (ANPAC) made changes to a policy that the policyholders only became aware of when it was time to make a claim. The complaint claims that ANPAC’s actions are a breach of contract and display bad faith.

In 2005, David Gary Smith and Lori Smith bought a home in Broken Arrow, Oklahoma that they insured with ANPAC. Among its coverages at the time they purchased it, the policy included full replacement value for the roof of the home. This was an option that they believe had to be selected and cost extra money.

In 2018, the home suffered storm damage, requiring that the roof be replaced. The Smiths put in a claim to ANPAC.

Instead of paying full value for a new roof, ANPAC claimed that in 2014 it had changed the Smiths’ full roof replacement coverage to cash value insurance coverage. This allowed ANPAC to depreciate the value of the roof and pay far less toward its replacement.

ANPAC claims it mailed the notice of the change, by regular mail, to the Smiths when the policy was renewed in 2014. The Smiths say they never received any such notice and did not know about the change.

The complaint quotes the findings of a previous case as saying, “It is the general rule that an insurance company is bound by the greater coverage in an earlier policy where the renewal contract is issued without calling the insured’s attention to a reduction in policy coverage.”

The Smiths have since received from ANPAC the notice that company says they should have received in 2014. The document is 96 pages long.

The complaint alleges that it is unreasonable to expect ordinary working people to search through a document of that length and be able to spot such a major change in a policy. The complaint alleges, “The first mention of indication changes had occurred to the policy was on page 5 of 96.” There the document says, “Your new policy includes coverage changes.”

Where the document does discuss changes, the language is “ambiguous,” the complaint claims, saying that “your new policy … may not cover the full cost to repair or replace your roof…” A clear statement of the change only occurs on page 10 of the 96-page packet, a placement that the complaint says is far from being clear and conspicuous, and it is contradicted by other statements later on in the policy. Furthermore, ANPAC raised rather than lowered the cost of the policy.

The class for this action is not defined. The complaint says it will be done later.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

American National P&C No Notice of Changes in Insurance Policy Complaint

March 20, 2020

If an insurance company makes changes to a policy’s coverage, what kind of notice, discussion, or consideration does it owe to policyholders? In this class action, the complaint alleges that American National Property and Casualty Company (ANPAC) made changes to a policy that the policyholders only became aware of when it was time to make a claim. The complaint claims that ANPAC’s actions are a breach of contract and display bad faith.

American National P&C No Notice of Changes in Insurance Policy Complaint

Case Event History

American National P&C No Notice of Changes in Insurance Policy Complaint

March 20, 2020

If an insurance company makes changes to a policy’s coverage, what kind of notice, discussion, or consideration does it owe to policyholders? In this class action, the complaint alleges that American National Property and Casualty Company (ANPAC) made changes to a policy that the policyholders only became aware of when it was time to make a claim. The complaint claims that ANPAC’s actions are a breach of contract and display bad faith.

American National P&C No Notice of Changes in Insurance Policy Complaint
Tags: Homeowners Insurance, Improper Notice or Process for Changes in Policy, Insurance